Material Cost: Wood £12.50
Metal fittings £7.25
Variable overheads per chair £4.50
Labour hours per chair Assembly 2 hours
Finishing 1 hour
Assembly labour costs £7.50 per hour and finishing labour is £6.25 per hour. Demand is expected to be 2,400 chairs per year selling at £70 per chair.
Fixed overheads are expected to be £45,000 and this includes depreciation of £9,000.

Fixed costs included in the above statement are £1,200,000 in manufacturing COGS and £100,000 in selling expenses. A special order for 50,000 cricket balls for £7.50 each has been received from Balls’R Us Sports Shops. Curtley has sufficient capacity to take this order and there will be no additional selling expenses. By how much would operating income be affected if the order was accepted?